UPDATE: The Australian Prudential Regulation Authority (APRA) has just announced its 2025 superannuation performance test results, revealing a significant improvement in the industry. Out of 563 tested products, only seven funds failed this year—a dramatic drop from 37 last year.
This development matters NOW more than ever, as it reflects a massive shift in the superannuation landscape. The performance test was designed to guide Australians away from underperforming funds, and it’s proving to be one of the most effective consumer protection initiatives in superannuation history.
In 2021, a staggering 1 million Australians were trapped in poor-performing super funds. Fast forward to today, and that number has plummeted to just 8,500. This is not merely a tidy-up; it signifies a complete overhaul—a “full Marie Kondo moment” for the industry.
The superannuation performance test is especially crucial for MySuper default funds, the options employers typically allocate to employees without active choices. Initially focused on these funds, the test now also encompasses various pre-mixed investment options, such as “balanced” and “high growth” funds, which most Australians may not even realize are included.
Each year, the stakes get higher for underperforming funds. If a fund fails the test, it must inform its members. Fail twice consecutively, and it cannot accept new entrants. This pressure has motivated funds to improve performance and transparency, benefiting millions of Australians.
The latest results illustrate a significant change in the super landscape. The mere existence of the “FAIL” label has pushed funds to enhance performance, ensuring that Australians are no longer stuck in subpar financial products.
As APRA continues to monitor these funds, the authority underscores the importance of consumer engagement. While the test may not be exciting weekend reading, its implications are profound. By shedding light on fund performance, the test empowers Australians to make informed decisions about their financial futures.
What’s next? Stakeholders and consumers should keep an eye on how these funds respond to the latest results. With pressure mounting, more changes are likely on the horizon.
Stay tuned for more updates as the APRA continues to enforce its performance measures, ensuring that Australians are equipped with the best superannuation options available. This is a developing story with critical implications for your financial well-being.
